BP boss Tony Hayward will dismiss claims that the UK's biggest company is profiteering from high oil prices on Tuesday when he is due to present annual figures which will be scarred by the effects of higher taxes and increased depreciation charges.

He will also maintain that the rise in the price of product - from $57 (£29) to around $91 (£46) a barrel in the past year - means that BP is having to hand over more output to various governments under price-based production-sharing agreements, and is also paying more to get in on the ground floor of promising exploration prospects.

The group's tale of woe, in marked contrast to last week's results from rival Shell, which produced the UK's largest- ever profits of £15.6 billion, has been circulating in financial circles for the past three weeks. Analysts have chopped back expectations of likely profits when the group produces its fourth-quarter figures this week.

A series of profit downgrades since then by the likes of Merrill Lynch, ABN Amro and Citi has sent BP's shares into sharp reverse and its stock market value has plunged by some £17bn to just below the £100bn mark.

Most brokers now expect to hear of net returns of little more than £2.2bn for the final three months of last year-down about 25% on expectations at the start of 2008.

That would leave the group's annual net profits down from £11bn to less than £9bn despite the dramatic increase in petrol and other energy prices faced by consumers over the past year.

Much of the damage is expected to come from a drop in margins at refineries but the group is expected to focus attention on the cost of global taxation as a direct result of higher oil prices, which may have increased its overall tax charge to a massive 43% of pre-tax profits against earlier expectations of around 36%.

Equally damaging, though, is an anticipated rise in the amount of oil that has to be handed over under production sharing agreements outside of the US and the North Sea that will cut into the group's official reserves.

Analysts expect to hear of promising finds in areas such as Argentina and North Africa and look for more news of the group's first venture into Canadian oil sands in partnership with Husky Energy.

"Hayward has a period of grace when he can pass blame for inherited problems on to his predecessor Lord Browne, and he has taken steps to introduce a more focused strategy at BP," commented one follower. "But the time is fast-approaching when he may have to look to more radical solutions to the group's problems."

One proposal is for BP to split itself in two with separate companies running the refining and marketing operations and looking after production and exploration.

A source close to the company. "I'm sure Hayward has examined the implications also but I have had no indication that he is ready to change the status quo."